NVIDIA's revenue doubles, investment firms favor US-Taiwan-Korea semiconductor chain

Global AI chip leader NVIDIA has reported a staggering 106% year-on-year increase in revenue, reaching $96.22 billion for its second quarter. The company also posted adjusted earnings per share of $2.22 and provided an optimistic outlook, forecasting third-quarter revenue to hit $108 billion, significantly surpassing market expectations.

Despite a general downturn in the broader U.S. stock market influenced by inflation data, NVIDIA's strong performance and future projections, including an anticipated 70% revenue growth, propelled its stock price upward in after-hours trading. This surge also supported the Philadelphia Semiconductor Index, which closed slightly higher.

Analysts attribute NVIDIA's success to sustained, robust demand from data centers, indicating that the AI industry is not merely a short-term bubble. The company's data center revenue alone soared by 117% year-on-year to $89 billion, accounting for over 90% of its total revenue. This growth is fueled by continued capital expenditure from major cloud service providers, alongside significant contributions from AI cloud, industrial, and enterprise clients, signaling a broadening adoption of AI infrastructure.

NVIDIA's substantial increase in supply procurement commitments, reaching $279 billion primarily for memory components, highlights a supply-demand imbalance and boosts the entire semiconductor supply chain. This includes chip foundries, high-bandwidth memory (HBM) manufacturers, and major U.S. tech giants.

In response to the AI boom, investment experts recommend a diversified cross-border asset allocation strategy across the United States, Taiwan, and South Korea. Taiwan's high-end foundries, advanced packaging, and server assembly supply chains are expected to benefit directly from NVIDIA's new chip architectures. South Korean memory chip giants, crucial for HBM production, are also positioned for growth. Meanwhile, U.S. tech titans like Microsoft, Amazon, and Google continue to drive the AI ecosystem through their capital expenditures, underscoring that the AI race is fundamentally a semiconductor race.